Social and Behavioral Sciences Commons^™

Understanding Without Explanation? A Philosophical Inquiry Into The Explanation Paradox Of Economic Models, Eric Haupt

Economics Theses

Conventional economic modeling is frequently criticized for being “unrealistic” due to the variety of unrealistic assumptions that underpin many models. Critics frequently wonder how models that are unrealistic or false can accurately explain economic phenomena. This criticism and the problem it presents for economics is captured by Julian Reiss’s “explanation paradox.” This paper aims to evaluate Reiss’s paradox and assess the problems it poses for economics as a positive science. To address this problem, I survey a variety of competing strategies offered by philosophers and economists before critically evaluating the validity of the paradox. I conclude that while economic models …